Shares of Square Inc.
SQ, +1.43%
are up 1% in morning trading Wednesday after Macquarie analyst Gus Papageorgiou began coverage of the stock with an outperform rating and $94 valuation. "We believe the way to properly view Square is as a business analytics tool for merchants founded on a payment solution," he wrote. Papageorgiou is upbeat about Square's ability to deliver value-added services to merchants, in part due to the vast amount of data that it has on businesses. Square's software and services business has grown faster than the transaction business for the last four years, he wrote. Papageorgiou also sees several encouraging secular trends, including increasing adoption of digital payments. Square shares have risen 33% in the past three months, while the S&P 500
SPX, +0.14%
has gained 13%.

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